The German government has thrown its formidable weight in Europe behind a campaign to keep Britain in the EU, describing the fallout from a UK exit from the union as a disaster for all parties and also supporting Washington's pressure on London to stay in.

Top government figures in Berlin made absolutely clear they saw continued UK membership of the EU as central to Berlin's priorities in seeking to reverse European economic decline and to counter protectionist pressures in France and other Mediterranean countries.

The intervention came as 114 Tory MPs voted to criticise the government for not including plans for an in-out referendum in the Queen's speech, a greater show of eurosceptic strength than ministers had anticipated.

The leading politicians in Berlin said they wanted to reopen the Lisbon treaty to repair the mess left by three years of financial crisis, supplying David Cameron with an opportunity to try to reset the terms of UK membership before putting the outcome to a referendum. But Berlin concedes that Paris may be the biggest problem in getting its way since the weak and unpopular President François Hollande opposes a treaty renegotiation that could open the way to a referendum in France, too, and bring him down.

The government of German chancellor Angela Merkel appears to see Britain as a key ally in its aim of shifting the focus of the EU's crisis management from austerity to embracing structural economic reforms, restoring competitiveness to European economies and generating growth and jobs, particularly for the young.

Senior figures in Berlin said that Britain was needed unconditionally in the EU to boost the competitiveness drive and because of its more open and global outlook compared with other EU countries. They said the Merkel government wanted to do whatever it could to help Britain in what was described as taking the right decision and avoiding a disastrous move.

A British exit from the EU would send fateful signals around the world, in the US and the far east, of an inward-looking Europe mired in fragmentation, provincialism and bickering.

While Merkel and senior cabinet members such asWolfgang Schäuble, the finance minister, favour renegotiating the Lisbon treaty to push through big political and economic policy shifts in the eurozone, Berlin acknowledges that this is a tall order because of the resistance in many other countries, mainly but not only France.

Cameron argues the single currency crisis has changed the EU, and is transforming the eurozone into a much more integrated core Europe, changing Britain's status, and wants the treaty renegotiated to reflect this fundamental shift. But senior officials in Brussels warn that any moves to substantially rewrite the Lisbon treaty would trigger a referendum domino effect, with not only Britain, but Ireland, parts of Scandinavia, perhaps the Netherlands and then France needing to stage referendums on a new deal.

The leading government figures in Berlin acknowledged that Hollande was opposed. The damage to Hollande could be twofold. The treaty changes would inevitably entail transfers of fiscal and economic policymaking powers to Brussels, something Paris opposes, then possibly a national vote on the new deal in an increasingly Eurosceptic country, according to recent opinion polls. Hollande played a prominent role in the yes campaign for the French referendum on an EU constitution in 2005 and lost. A repeat of the failure could cost him his office.

The differences between Berlin and Paris are reinforcing their estrangement, with no improvement expected until the dust settles after the German elections in September when Merkel is bidding for a third term.

Berlin is also worried that France, Italy, and Spain are stuck in a vicious downward cycle of growing unemployment, austerity, and relative lack of meaningful reform. The Germans are relaxing the austerity that has been the principal response to the sovereign debt crisis of the past three years, but are demanding sweeping structural reforms in return in the form of labour law and labour market changes, longer working weeks, pension and social security reforms. Berlin is prepared to give France and Spain an extra two years to reach budget deficit targets under the euro rulebook, but is insisting that the two years not be wasted in policy paralysis.

While the Germans are not making explicit linkage between easing the deficit targets and launching reform programmes, they are also warning that they are prepared to help struggling countries but only on condition that the time is use properly to tackle what it identifies as the underlying problems. The issues are certain to be raised at two EU summits soon, one next week, the other next month.

While senior government figures are wary of hectoring Paris on the policies Hollande should be pursuing, there is a sense of exasperation in Berlin with Paris, that "something has to happen", that the problems are well-known, but that Hollande is failing to deliver.